Shares of China-based IT services provider iSoftStone Holdings Ltd. rose 36.6 percent in early trading Tuesday in their stock market debut as investors again put their money on the Chinese tech sector.
The shares were trading at $17.25 at midmorning on the New York Stock Exchange, up from an initial public offering price of $13. They earlier rose as high as $18.77.
Investors recently have had an insatiable demand for Chinese tech stocks. One new issue last week more than doubled in price in its first day of trading.
The outsized demand has caused some observers to worry about a bubble, similar to the U.S. tech boom and bust of the late 1990s and early 2000s.
ISoftStone is based in Beijing. It sells IT services to companies including Huawei, Bank of China, China Life, UBS, IBM, Microsoft, Sharp, Alcatel-Lucent and AT&T.
ISoftStone's net revenue grew to $135.2 million in the first nine months of the year, up 50.2 percent from a year earlier. Ordinary shareholders swung to a per-share loss of 2 cents from a profit of 1 cent.
Much of iSoftStone's revenue is on a nonexclusive, project-by-project basis, the company said in a regulatory filing.
ISoftStone and shareholders on Monday sold 10.8 million American Depositary Shares at $13 each, raising about $140.8 million. The expected pricing range was $11 to $13.
The company said it would use its share of IPO proceeds to repay bank borrowings and for general purposes. Sellers in the IPO include AsiaVest Opportunities Fund and Infotech Entities.
The underwriters reserved up to 650,000 ADS for directors, officers, employees and others at the request of the company.
A unit of Singapore's Temasek Holdings was expected to purchase $20 million of ordinary shares in a separate transaction alongside the IPO, according to a regulatory filing.
UBS Investment Bank, JPMorgan and Morgan Stanley led the underwriters on the IPO. The shares are trading on the New York Stock Exchange under the symbol "ISS."
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